As the economic downturn gains momentum it is more important than ever for consumers to take out some form of income protection, so they can pay their monthly bills should they lose their jobs, warns Payment Protection Insurance sector lobbyist Sara-Ann Burgess from Burgesses.
She comments: “Only this week we’ve seen the collapse of the fourth largest investment bank, Lehman Brothers and witnessed on the news, employees packing up their belongings in boxes, facing an uncertain future. XL Airways employees were equally devastated to find they were out of a job last week and there’s a general nervousness. Now is not the time to turn your back on income protection. It is vital that during these difficult times, everyone has a financial safety net to help meet monthly commitments should something happen. Even if you have savings to fall back on, how long will these last given the current food, fuel and utility prices? Income protection provides a monthly replacement income for up to a year, paying those all important bills and giving much-needed financial breathing space to those who either need to find a new job or recover from an accident or sickness. Over-priced products have been marketed by High Street banks and building societies for years and people now take the view they would rather save their money and take a chance. In this current climate, it is a very risky strategy and one I do not recommend. However, there are many more ethical independent income protection providers who offer good value products that are very comprehensive in their cover and not over-priced. Prices start at £1.90 per £100 of monthly income. Over the last week we’ve seen people in despair, wondering how to pay their bills, feed their children and keep a roof over their head when there are no wages coming in. Whilst the redundancy could not have been avoided, the financial hardship that will inevitably follow can."